IV. APPLICATIONS AND USES FOR FOOD BALANCE SHEETS DATA

1. STANDARDIZATION OF FOOD BALANCE SHEETS

The utilization of all the information which was assembled for the construction of a
food balance sheet often ends up in a rather long list of food commodities. This is
certainly very useful in order to select the appropriate food composition factors which
are required for expressing per caput food supplies in terms of energy, protein and
fat content. On the other hand, this detailed presentation no longer has the advantage of
showing a comprehensive picture of a country's food supply. This dilemma can be solved by
standardizing the detailed food balance sheet. Standardization can be achieved by showing
only primary commodities, i.e. processed commodities are converted into their originating
primary commodity equivalent. Because the statistical information for processed
commodities is mostly limited to trade, the commodity list can be confined to primary
commodities - except for sugar, oils, fats and alcoholic beverages. Whenever possible,
trade in processed commodities is expressed in the originating/parent commodity
equivalent. This procedure greatly facilitates the analysis of food balance sheets with no
loss of pertinent information. This is the sort of tool that planners and economists
concerned with the preparation of development plans in the food and agriculture sector
need.

The section that follows describes the various steps to be taken in the standardization
process.

Food
Balance Sheet

Population 14.000 (thousand)

Country
..............................................

Year.................

(Thousand
metric tons, unless otherwise specified)

Commodity

Production

Domestic utilization

Per caput consumption

Input

Output

Change

Gross

Supply

Gross

Total

Feed

Seed

Manufacture for

Waste

Food

Kg/

Grams/

Cal./

Prot./

Fat/

in Stocks

Import

Export

Food

Industrial

year

day

day

day

day

Use

No

Grams

Grams

ILLUSTRATION I

Wheat, hard

1300

1300

1300

145

1064

91

Wheat, hard/flour

1064

904

904

904

18

886

63.3

173.4

607

23.2

2.4

Wheat, soft

410

400

810

810

45

708

57

Wheat, soft/flour

708

566

45

611

611

12

599

42.8

117.2

409

11.5

1.5

Other cereals

2500

2500

80

2420

750

236

1259

175

Other cereals/flour

1259

1007

35

1042

1042

73

969

69.2

189.6

639

18.4

3.6

Cow milk

400

13

413

413

150

21

242

17.3

47.4

31

1.7

1.7

Cow milk/skim milk

150

144

144

144

36

10

98

7

19.2

7

0.7

0.1

Goat milk

22

22

22

11

11

0.8

2.2

2

0.1

0.1

Sheep milk

18

18

18

9

9

0.6

1.8

2

0.1

0.1

Total

1697

55.7

9.5

ILLUSTRATION II

Wheat, hard

1300

1300

1300

145

112

1043

607

23.2

2.4

Wheat, soft

410

456

866

866

45

72

749

409

11.5

1.5

Other cereals

2500

44

2544

80

2464

750

236

266

1212

639

18.4

3.6

Cow milk

400

13

413

413

38

31

344

38

2.4

1.8

Goat milk

22

22

22

11

11

2

0.1

0.1

Sheep milk

18

18

18

9

9

2

0.1

0.1

Total

1697

55.7

9.5

ILLUSTRATION III

Wheat

1710

456

2166

2166

190

184

1792

1016

34.7

3.9

Other cereals

2500

44

2544

80

2464

750

236

266

1212

639

18.4

3.6

Cereals total

4210

500

4710

80

4630

750

426

450

3004

1655

53.1

7.5

Cow milk

400

13

413

413

38

31

344

38

2.4

1.8

Goat + sheep milk

40

40

40

20

20

4

0.2

0.2

Milk total

440

13

453

453

38

51

364

42

2.6

2

Total

1697

55.7

9.5

ILLUSTRATION IV

Wheat

969.5

258.6

1228.1

1228.1

107.7

104.3

1016.1

1016

34.7

3.9

Other cereals

1317.5

23.2

1340.7

42.2

1298.5

395.2

124.4

140.2

638.7

639

18.4

3.6

Cow milk

44.0

1.4

45.4

45.4

4.2

3.4

37.8

38

2.4

1.8

Goat + sheep milk

8.0

8.0

8.0

4.0

4.0

4

0.2

0.2

Total

2339.0

283.2

2622.2

42.2

2580.0

399.4

232.1

251.9

1696.6

1697

55.7

9.5

Illustration I shows the information referring to cereals and milk in a detailed
food balance sheet.

Illustration II shows the first step: bringing processed products back to their
originating commodities, i.e. flour to cereals, skim milk to cow milk. For this purpose,
calories and nutrients from processed products are simply added to the calorie and
nutrient values of the primary commodity.

The "input" to the processed commodity - Wheat, hard (1064); Wheat, soft
(708); Other cereals (1259) and Skim milk (150)- is subtracted from the quantities shown
under "Manufacture for food". This should eliminate the data under the latter.
If more than one processed product results from the originating commodity, then each input
is subtracted. In the case of by-products, just one subtraction is necessary cancelling
all processing inputs.

The data of other entries concerning the processed products with the exception of
"food" (i.e. in this example trade, feed, waste) are added to the equation of
the originating commodity after multiplication by the reciprocal of the extraction rate.

Wheat, hard:

Extraction rate (wheat/flour)

85%

Reciprocal

118%

Waste

Wheat

91

Wheat flour

18

Wheat equivalent of flour (18 x 118%)

21

____

Total waste (wheat equivalent)

112

Wheat, soft:

Extraction rate (wheat/flour)

80%

Reciprocal

125%

Imports

Wheat

400

Wheat flour

45

Wheat equivalent of flour (40 x 125%)

56

___

Total imports (wheat equivalent)

456

Waste

Wheat

57

Wheat flour

12

Wheat equivalent of flour (12 x 125%)

15

____

Total waste (wheat equivalent)

72

Other cereals:

Extraction rate (other cereals/flour)

80%

Reciprocal

125%

Imports

Other cereals flour

35

Other cereals equivalent of flour (35 x
125%)

44

Waste

Other cereals

175

Other cereals flour

73

Other cereals equivalent of flour (73 x
125%)

91

____

Total waste (other cereals equivalent)

266

Cow milk:

Extraction rate (milk/skim milk)

96%

Reciprocal

104%

Feed

Skim milk

36

Milk equivalent of skim milk (36 x 104%)

38

Waste

Cow milk

21

Skim milk

10

Milk equivalent of skim milk (10 x 104%)

10

____

Total waste (milk equivalent)

31

The "food" data of the original/parent commodity is now recalculated using
the new values of its equation. One equation for the primary commodity now replaces the
two former equations. The above procedure involves one subtraction, some multiplications
and final additions.

In Illustration III a further reduction of the number of equations in the
standardization process can be achieved by aggregating the equations for commodities of
similar nutritive values, such as wheat and other cereals into cereals, and cow, goat and
sheep milk into milk, etc. This procedure requires simply adding the equations of the
commodities concerned which reduces a very long list of commodities to a workable size for
input into econometric models.

Illustration IV. While there are practically no difficulties in standardizing
the equations for individual commodities or groups of commodities of similar nutritive
values (Illustrations II and III) some conceptual problems arise in calculating the
aggregate equation for the whole food balance sheet. Such an aggregate is a useful tool
for many types of analysis. It enables the calculation of ratios, such as the ratio of
production to total supply or imports to total supply, which are helpful in assessing
self-sufficiency or import-dependence. The calculation of shares of the different
components over total utilization allows the assessment of trends of domestic utilization
versus exports, for example.

The first problem in calculating the aggregate equation concerns the elimination of
intermediate consumption and double-counting, particularly when there exist processed
commodities originating from the same parent commodity (e.g. skim milk and butter) which
belong by their very nature to different food groups, e.g. skim milk to the food group
"Milk" and butter to the food group "Oils and fats". The appropriate
procedure has already been described and need not be repeated here (see Illustration II).
The second problem is related to the selection of the unit to be used for the conversion
of the elements of the various commodities into homogeneous values. These can be monetary
values or nutritive values. In the first case, prices are used as conversion factors, in
the second, the nutrient content per weight.

In the example below, caloric factors are used to convert the standardized equations of
wheat, other cereals, cow milk and goat and sheep milk into homogeneous values which can
then be added in order to obtain the aggregate of these commodities.

After having standardized the equations of the various commodities (see Illustration
III) the number of calories for the newly-defined commodities are divided by the new
"food" quantities in order to arrive at an endogenous calorie conversion factor.
Needless to say, in the unstandardized detailed food balance sheet (Illustration I) these
factors came from an external food composition table. Each element in the equation can now
be converted into calories. The calculations for the various commodities are illustrated
below.

The sums of each column (production, trade, feed, seed, manufacture, waste and food)
represent the caloric value (in terms of kilocalories/caput/day) of the respective
elements of all the commodities shown in Illustration I.

2. IMPORT DEPENDENCY RATIO (IDR)

In the course of analysing the food situation of a country, an important aspect is to
know how much of the available domestic food supply has been imported and how much comes
from the country's own production. The IDR answers this question. It is defined as

Imports

IDR = ____________________________________ x 100

production + imports - exports

The complement of this ratio to 100 would represent that part of the domestic food
supply that has been produced in the country itself. There is, however, a caveat to be
kept in mind: these ratios hold only if imports are mainly used for domestic utilization
and are not re-exported.

Based on the figures contained in Illustration III above, the IDR for wheat, other
cereals, cow milk, total cereals and total milk would be calculated as follows:

Wheat:

456

IDR = ____________________________________ x 100 = 21.05%

1710 + 456 - 0

Other cereals:

44

IDR = ____________________________________ x 100
= 1.79%

2 500 + 44 - 80

Cow milk:

13

IDR = ____________________________________ x
100 = 3.15%

400 + 13 - 0

Total cereals:

500

IDR = ____________________________________ x
100 = 10.80%

4 210 + 500 - 80

Total milk:

13

IDR = ____________________________________ x
100 = 2.87%

440 + 13 - 0

Based on these calculations, it can be concluded that around 80% of the domestic supply
of wheat, 98% of other cereals, 97% of cow milk, 89% of all cereals and 97% of all milk
come from domestic production.

Using the figures shown in Illustration IV, the IDR for the aggregate of cereals and
milk, including processed products derived therefrom, would be:

283.2

IDR =
__________________________________ x 100 = 10.98%

2339.0 + 283.2 - 42.2

indicating that almost 90% of the domestic supply of this aggregate was produced in the
country.

3. SELF-SUFFICIENCY RATIO (SSR)

The self-sufficiency ratio expresses the magnitude of production in relation to
domestic utilization. It is defined as:

Production

SSR = ________________________________ x 100

Production + imports - exports

Again, as in the case of the IDR, the SSR can be calculated for individual commodities,
groups of commodities of similar nutritional values and, after appropriate conversion of
the commodity equations, also for the aggregate of all commodities.

Using the figures shown in Illustrations III and IV, the self-sufficiency ratio would
be determined as follows.

Wheat:

1710

SSR = _____________________________ x 100 = 78.95%

1710 + 456 - 0

Other cereals:

2 500

SSR = ________________________________ x 100 = 101.46%

2 500 + 44 - 80

Cow milk:

400

SSR = _______________________________ x 100 = 96.85%

400 + 13 - 0

Total cereals:

4 210

SSR = _______________________________ x 100 = 90.93%

4 210 + 500 - 80

Total milk:

440

SSR = ______________________________ x 100 = 97.13%

440 + 13 - 0

Based on the figures shown in Illustration IV, the SSR for the aggregate of cereals and
milk, including processed products derived therefrom, would be:

2
339.0

SSR = ______________________________ x 100 = 90.66

2 339.0 + 283.2 - 42.2

indicating that around 90% of the country's supply of cereals and milk originates from
the country's own production.

In the context of food security, the SSR is often taken to indicate the extent to which
a country relies on its own production resources, i.e. the higher the ratio the greater
the self-sufficiency. While the SSR can be the appropriate tool when assessing the supply
situation for individual commodities, a certain degree of caution should be observed when
looking at the overall food situation. In the case, however, where a large part of a
country's production of one commodity, e.g. other cereals, is exported, the SSR may be
very high but the country may still have to rely heavily on imports of food commodities to
feed the population. This is easily demonstrated by increasing in Illustration I both
production and export figures of the commodity "other cereals" by 1000 MT. The
elements for production and exports in the equation for "total cereals and milk"
in Illustration IV would change to 2869.2 and 569.2, respectively. The SSR and IDR would
then change as follows:

2 866.0

SSR = ________________________________ x 100 = 111.09%

2 866.0 + 283.2 - 569.2

283.2

IDR = ________________________________ x 100 = 10.98%

2 866.0 + 283.2 - 569.2

It follows that, in spite of a very high self-sufficiency rate, the country imports
about 11% of its supply of the aggregate "Cereals and Milk" with only about 90%
of its domestic supply coming from the country's own production.

These explanations have been given to show that the self-sufficiency rate (as defined
above) cannot be the complement to 100 of the import dependency rate, or vice-versa.

4. ANALYSIS OF THE PATTERN OF PER CAPUT FOOD SUPPLY

Food balance sheets contain the basic information which is useful in analyzing a
country's food supply situation. The section below provides a few examples regarding the
analysis of the pattern of per caput food supplies for the world.

Table 1 shows the daily per caput food supply by product group in terms of
calories, protein and fat over the 30-year period 1961 to 1995. The figures in Table 2 are
based on Table 1 and show the percent contribution of the various product groups to the
daily per caput food supplies. Table 3 shows the trends and changes of the pattern
of the per caput food supplies. Table 4 shows the annual per caput supply of
the various product groups in terms of kilograms together with their indices.

In reviewing the tables, it becomes clear that over the 30-year period the daily per
caput food supply increased steadily. By the mid-nineties the energy supply was about
20 percent and the protein supply 16 percent higher than at the beginning of the sixties.
The fat content of the diet rose by almost 50 percent over this period.

Examining the share of vegetable and animal products in total food supply, it can be
observed that their contribution remained fairly stable: for energy at a ratio of 5 to 1,
and for protein at 2 to 1. In the case of fat, however, some noteworthy shifts can be
observed during the period under observation. While the share of vegetable fat in the
total fat supply increased steadily, the contribution of animal fat dropped.

Cereals evidently are the major source of energy and protein. They alone contribute
about half of the supply of both energy and protein. Since the beginning of the sixties,
the daily per caput supply of energy rose by about 20 percent and that of protein
by about 15 percent. It is interesting to note the important role of cereals as a source
of fat in the diet, which is often not fully recognized. Almost 10 percent of per caput
fat supplies are derived from cereals.

Starchy roots play a minor role in the world's diet, contributing about 5 percent to
the energy and 3 percent to the protein supply. Their consumption has dropped by more than
a quarter during the period under observation.

Sugar, syrups and honey are mainly a source of energy, and in recent years provided
around 9 percent of the total calorie supply. Consumption of these products increased
steadily from the early sixties and in 1995 was in terms of quantity a quarter higher than
at the beginning of the period under observation.

Pulses, tree nuts and oilcrops are an important source of protein. In recent years,
they contribute 9 percent to the overall protein supply, 7 percent to the supply of fat
and less than 5 percent of the total energy supply. However, a considerable shift took
place regarding the consumption pattern: while per caput food supplies of pulses
decreased by one third, supplies of tree nuts and oilcrops increased by more than a
quarter in quantitative terms.

Vegetable oils and animal fats are the major sources of fat. Nevertheless, they
contribute less than half of the total per caput fat supply, indicating the
considerable amount of invisible fat from other product groups in the diet. The
considerable shift that took place from animal fats to fats of vegetable origin during the
last decades is worth noting.

Vegetables and fruits are usually considered as sources of minerals and vitamins. It
should, however, not be overlooked that they also provide energy, protein and small
amounts of fat. About 5 percent of calories and protein are derived from these product
groups. At the world level they contribute to twice as many calories as eggs and fish
together. Their contribution to the protein supply is as large as that of fish and twice
that of eggs, and their contribution to the fat supply is as large as that of fish.

Meat consumption increased considerably over the period of observation and was in 1995
about 60 percent higher than in the early sixties. In recent years meat contributes 7
percent of calories, 17 percent of protein and 22 percent of fat.

Eggs are important mainly as a source of protein and fat. They contribute around 3
percent of the total protein, and fat supply is around 3 percent. Their annual per
caput supply increased steadily during the period of observation and in 1995 is 60
percent higher than at the beginning of the period under observation.

Milk is, after meat, with around 10 percent, the second largest source of animal
protein. It is also important for its fat and calorie content: around 10 percent of fat
and 4 percent of calories are derived from milk.

Fish is important mainly as a source of protein. While it contributes almost 6 percent
to the overall protein supply, only 1 percent of the calorie supply is derived from fish.
However, it is worth noting that its consumption in terms of quantity has almost doubled
since the early sixties.